Stride Property Group · NZX:SPG
Stride Property — DNZ Property Fund — H1 FY2012 Earnings Presentation
32 slides from Stride Property's earnings presentation, November 2011
Slide 1: Shareholder Briefings & Interim Results
SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 2: Agenda
2 Agenda Highlights Financial Performance Paul Duffy Chief Executive Capital Management Property Portfolio Patrick O’Reilly General Manager Property Market Overview Outlook Paul Duffy Chief Executive Q&A DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30
Slide 3: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
3 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 4: Highlights
4 Highlights Increased cash dividend Q2 FY12 Q2 DIVIDEND 2.1 CENTS 2.1 cent cash dividend for the LVR 37.8% quarter (nil imputation credits) 8.3 cent cash dividend expected for FY12 Full year distribution expected to remain within the dividend policy range of 75-85% of distributable profit Distribut
Slide 5: Highlights
5 Highlights Occupancy 98.3% OCCUPANCY 98.3% WALT extended to 4.5 years WALT 4.5 yrs 114 lease transactions over147,750m2 $31.6m (gross) asset sales Asset values stable DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 6: Total Shareholder returns of 35.9%
6 Total Shareholder returns of 35.9% Source: IRESS Assumes the reinvestment of dividends (but not imputation credits) on the ex-date 16 August 2010 to 10 November 2011 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 7: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
7 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 8: Distributable Profit – Consolidated Group
8 Distributable Profit – Consolidated Group Actual Actual Variance 30 Sept 2011 30 Sept 2010 ($ millions) ($ millions) ($ millions) Net profit/(loss) before tax 11.0 (26.1) 37.1 NZ IFRS and other adjustments: - Net change in fair value of investment properties 1.0 (0.1) 1.1 - Net change in fair valu
Slide 9: Financial Performance – Consolidated Group
9 Financial Performance – Consolidated Group Actual Actual Variance 30 Sept 2011 30 Sept 2010 (restated) ($ millions) ($ millions) ($ millions) Net rental income 25.9 25.9 - Management fee income 0.6 0.3 0.3 Corporate expenses (3.8) (5.4) 1.6 Operating profit before net finance expenses and income t
Slide 10: Financial Summary
10 Financial Summary As at As at 30 Sept 2011 31 March 2011 ($ millions) ($ millions) Property values1 608.2 637.7 Bank debt drawn 222.0 252.9 2 Bank loan to value ratio 37.8% 40.4% Equity 378.9 382.3 Shares on issue 247.6 246.6 NTA per share 3 $1.52 $1.54 Adjusted NTA per share4 $1.54 $1.55 1 Asset
Slide 11: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
11 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 12: Capital Management
12 Capital Management As at Covenant Covenant 30 Sept 2011 Loan to Value Ratio (Bank Debt / Property Values) < 50% 37.75% Interest Cover Ratio (EBIT / Interest and Financing Costs) > 1.75 x 2.29 x Fully Leased Unexpired Term1 > 3.5 years 4.39 years Banking facility reduced from $350m to $300m (28 Se
Slide 13: Capital Management
13 Capital Management As at Covenant Covenant 30 Sept 2011 Loan to Value Ratio (Bank Debt / Property Values) < 50% 37.75% Interest Cover Ratio (EBIT / Interest and Financing Costs) > 1.75 x 2.29 x Fully Leased Unexpired Term1 > 3.5 years 4.39 years A further gross realisation of $31.6m from asset sa
Slide 14: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
14 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 15: Portfolio Summary
15 Portfolio Summary Overview 30 Sept 2011 31 March 2011 30 Sept 2010 Properties 48 50 54 Tenants 261 283 279 Net Lettable Area (m2) 360,683 371,481 379,934 WALT (years) 4.5 4.3 4.4 Occupancy Rate (by area) 98.3% 97.9% 96.1% Asset Valuation $608m $638m $700m DNZ PROPERTY FUND LIMITED :: SHAREHOLDER
Slide 16: Portfolio Diversification
16 Portfolio Diversification The above graphs are as at 30 September 2011 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 17: Top 10 Tenants by Contract Rental
17 Top 10 Tenants by Contract Rental The above graph is as at 30 September 2011 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 18: Major Lease Transactions Completed
18 Major Lease Transactions Completed Contract Tenant Commencement Area m2 Term Rental $ Goodyear & Dunlop Tyres1 September 2015 9,730 6 years Market 2015 New Zealand Post September 2011 6,027 6 years 550,000 DDB June 2012 3,659 6 years 921,000 Carter Holt Harvey December 2012 3,340 6 years 363,000
Slide 19: Lease Expiry Profile by Contract Rental
19 Lease Expiry Profile by Contract Rental DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 20: Lease Expiry Profile by Contract Rental
20 Lease Expiry Profile by Contract Rental Target DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 21: Lease Expiry Profile by Contract Rental
21 Lease Expiry Profile by Contract Rental Target DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 22: Lease Expiry Profile by Contract Rental
22 Lease Expiry Profile by Contract Rental 30 September 2011 31 March 2011 Target DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 23: Major Lease Expiries
23 Major Lease Expiries FY Property Tenant NLA m2 2013 Columbia Avenue, Christchurch Progressive 12,665 2013 20 Rockridge Ave, Auckland CEVA 10,239 2013 35 Maclaggan Street, Dunedin The Warehouse 6,433 2013 1 Grey Street, Wellington Westpac 4,266 2013 1 Grey Street, Wellington MFAT 1,586 2013 1 Grey
Slide 24: Portfolio Occupancy
24 Portfolio Occupancy Occupancy (%) Occupancy (%) Vacancy (sqm) Net Lettable Area Property 31 March 2011 30 Sept 2011 30 Sept 2011 (sqm) 30 Sept 2011 8 Rockridge Avenue, Penrose 74% 74% 811 3,112 650 Great South Road, Greenlane 93% 75% 2,095 8,390 80 Greys Avenue 87% 100% - 5,457 7 - 9 Fanshawe Str
Slide 25: Foodstuffs Portfolio
25 Foodstuffs Portfolio Three properties in Napier, New Plymouth and Wellington Settled 4 October 2011 $40.7m 18 year leases to Foodstuffs (Wellington) Co-op Limited WALT increases to 5.23 years equivalent as at 30 September 2011 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS F
Slide 26: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
26 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 27: Total Returns
27 Total Returns Wellington yields have begun to soften, with earthquake risk becoming more paramount Auckland yields have stabilised during the year and are expected to improve as confidence returns and vacancy is absorbed DNZ asset values remain stable as at 30 September 2011 DNZ PROPERTY FUND LIM
Slide 28: DNZ PROPERTY FUND LIMITED SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED
28 DNZ PROPERTY FUND LIMITED :: SHAREHOLDER BRIEFINGS & INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2011
Slide 29: Capital Management
29 Capital Management Secured (post 30/09/2011) a revised $300m bank term debt bank facility effective from 31/10/2011 Evenly split with existing bankers ANZ, BNZ and CBA The facility comprises a $150m three year tranche and a $150m four year tranche, expiring in October 2014 and October 2015 respec
Slide 30: Strategy
30 Strategy Leverage off existing portfolio opportunities to maximise cashflow Acquisitions that further enhance the portfolio – Foodstuffs portfolio post 30/09/2011 $40.7m Realise the potential of the Penrose development land through securing design build opportunities Pre-development planning for
Slide 31: Outlook
31 Outlook Slow economic recovery Insurance premium pressure FY13 & FY14 lease expiry focus Summary Competitive business environment Cash dividend of 2.1 cents for Q2 FY12 - 8.3 cent cash dividend expected for full year FY12 Expected tax payable position in FY13 Implementation of a Share Buyback Sch
Slide 32: Thank You
32 THANK YOU Important Notice: Certain statements in this presentation constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors (many of which are beyond the control of DNZ) which may cause the actual results